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Interaction between product market and labour market power: evidence from France, Belgium and Chile

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  • Jose Miguel Benavente
  • Sabien Dobbelaere
  • Jacques Mairesse

Abstract

This article jointly estimates price-cost mark-ups and union bargaining power of manufacturing firms in France, Belgium and Chile. Our GMM results provide strong evidence of price-cost mark-ups being underestimated when labour market imperfections are ignored, corresponding to the omission of the part of product rents captured by the workers.

Suggested Citation

  • Jose Miguel Benavente & Sabien Dobbelaere & Jacques Mairesse, 2009. "Interaction between product market and labour market power: evidence from France, Belgium and Chile," Applied Economics Letters, Taylor & Francis Journals, vol. 16(6), pages 573-577.
    • Handle: RePEc:taf:apeclt:v:16:y:2009:i:6:p:573-577
    DOI: 10.1080/13504850701206478
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    References listed on IDEAS

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    1. Hildreth, Andrew K G & Oswald, Andrew J, 1997. "Rent-Sharing and Wages: Evidence from Company and Establishment Panels," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 318-337, April.
    2. Klette, Tor Jakob & Griliches, Zvi, 1996. "The Inconsistency of Common Scale Estimators When Output Prices Are Unobserved and Endogenous," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(4), pages 343-361, July-Aug..
    3. Jacques Mairesse & Jordi Jaumandreu, 2005. "Panel‐data Estimates of the Production Function and the Revenue Function: What Difference Does It Make?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(4), pages 651-672, December.
    4. Schroeter, John R, 1988. "Estimating the Degree of Market Power in the Beef Packing Industry," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 158-162, February.
    5. José Miguel Benavente & José Luis Contreras, 2006. "Margen de Utilidad y Distribución de las Rentas: La industria manofacturera chilena durante los noventas," Working Papers wp219, University of Chile, Department of Economics.
    6. Hall, Robert E, 1988. "The Relation between Price and Marginal Cost in U.S. Industry," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 921-947, October.
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    Cited by:

    1. Sabien Dobbelaere & Mark Vancauteren, 2014. "Market imperfections, skills and total factor productivity : Firm-level evidence on Belgium and the Netherlands," Working Paper Research 267, National Bank of Belgium.
    2. Sabien Dobbelaere & Rodolfo Lauterbach & Jacques Mairesse, 2016. "Micro-evidence on product and labor market regime differences between Chile and France," International Journal of Manpower, Emerald Group Publishing Limited, vol. 37(2), pages 229-252, May.

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